A strategy is the have and have nots in the corporate world. Large enterprises can use one of the “Big 5” consulting firms that tap into their industry experts. These consultants conduct deep research and analysis to determine how the company compares to its competitors. They identify market gaps and provide inside information about the competition’s strategy. Taking this data, the consultant can tell the company where to go and how to invest their resources. Unfortunately, the strategy processes have little variation and all produce similar directions for growth. This results in the fact that the advice that a company receives varies little from the same advice their competitors get. This leads to a stalemate in the market place.
Smaller organizations run into different strategic issues. The first roadblock is being able to pay for the price of employing a “Big 5” consultant. Next, these organizations struggle to keep up with day-to-day operations. Having a lack of time for the formal strategic process forces small businesses to turn into boutique firms or create a limited strategy by themselves. For that reason, companies then piece together plans on gut feelings and intuitions when they don’t have the resources to develop a detailed market analysis. This is the makings of a half-baked strategy.
There are numerous issues that reside in the development of many strategic plans. The first issue is when a company bases its strategic plan on their revenue goals, which is not a strategy but simply a financial plan. Strategies are not on a routine cycle and the outcomes of the annual financial plan are neither strategic nor creative.
A separate issue in the planning process is when the plans are not specific and just aspirational. These plans are then not actively supported or funded. This situation is known as the curse of having too many great ideas that leads the organization to stay in its routine.
The third issue with company strategies is that they create a rigid and inflexible plan. Once a company places a significant investment in its strategy, the organization will then struggle if the market conditions change. This leaves the organization in a position where they will be unable to adjust to match the dynamic nature of the market.
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